Abstract
This research attempts to (1) identify the factors that influence strategic decision making (i.e., a choice made among various strategic options), and (2) establish their relative importance in the context of new product development. Hence, this study's research question is formulated as follows: from a descriptive perspective what factors prevail in managers' strategic decision making on new product development, and from a normative perspective is this behavior optimal? An exploratory case research study generated a four-dimensional framework of strategic decision making. In 17 companies, the decision-making processes and subsequent implementation of 22 business innovation projects were studied. Managers' choices are determined by the assessment of (1) the business opportunity, (2) the feasibility, (3) the competitiveness, and (4) the leverage opportunities provided by the strategic option. The research question was then further addressed in a field site survey of 144 managers of ChemCorp, a global, multidivisional chemicals company. The ex ante conjoint study shows that feasibility and business opportunity prevail over competitiveness and leverage at the decision-making moment. Using PLS-Graph revealed that a manager's idiosyncrasies and the current and the future context of the division to which they belonged barely affected the relative weight of the decision-making criteria: only the division's customer power and the threat of new entrants significantly influence positively the support for business opportunity assessments. This raised an important question: if feasibility and business opportunity appear as being, overall, the two most important strategic decision-making criteria ex ante, are they key differentiators between success and failure ex post? An ex post critical incident study was conducted on 75 successful innovations and 69 failed innovations reported by the ChemCorp respondents. Using PLS-Graph, this study shows that the competitiveness of a strategic option is a very important predictor of new project success. While the findings await replication in other industries (e.g., industries of a less capital-intensive nature), they are intriguing: strategic innovation decision making may be off track when reality is accounted for.